By default, the dividend payment method of the Fund is cash dividend. If you want to reinvest in dividends, you must set them in advance before dividends. Dividends will not reduce the fund share. If investors choose cash dividends, the market value of the fund will be reduced, because part of the market value will become cash. If investors choose to reinvest in dividends, their fund share will increase, but the market value will remain unchanged.

If the net value of the fund is too high, investors may be afraid of heights and dare not buy it. Divided by the net value seems to attract more investors. Dividend shows that the performance is good, at least there is no loss, and dividends can be paid, which can enhance investors' trust in the fund.

Extended data:

Precautions for reinvesting fund dividends:

If investors plan to invest in a fund for a long time, they can choose to reinvest in dividends, and the reinvested part will not charge subscription fees, which can save some expenses. Dividend reinvestment can be converted into shares no matter how much money. However, this part of the dividend reinvestment can only be purchased according to the net value of the dividend payment date, and the dividend will be calculated according to the date.

Dividend reinvestment is suitable for these situations: investors have plans to invest in funds for a long time, and dividends are temporarily useless to users. At this time, they can choose to reinvest in dividends. The other is very optimistic about the prospects of the fund, and it is expected that there will be more room for growth. At this time, if you choose dividend reinvestment, you can achieve the investment goal of rolling interest.

Baidu Encyclopedia-Fund Dividends

Baidu Encyclopedia-Net Fund Value